ClearView books flat underlying net profit
Insurance and wealth management firm ClearView Wealth Ltd says it is well positioned to take advantage of the growth in the life insurance and wealth sectors as the company reported a flat underlying profit.
ClearView on Monday booked a net profit of $22.3 million for the 12 months to June 30, 2012, up 158 per cent on the prior year's profit of $8.67 million.
The bottom line was boosted by a $13.9 million pre-tax gain related to a reduction in long-term discount rates used to determine life insurance policy liabilities; and no transition, restructure or acquisition-related costs, which was considered unusual in the group's activities.
Underlying profit, which excludes one-off items, was 0.4 per cent lower at $19.2 million.
ClearView managing director Simon Swanson said the life insurance and wealth management sectors enjoyed strong long-term growth potential due to underinsurance and the forthcoming increase in mandated superannuation contributions.
"Although shifting market conditions can at times be challenging, they will not alter the basic long-term growth trajectory of these sectors," Mr Swanson said in a statement.
"Clearview has reached an inflection point where it is now well positioned to participate in the growth of the life and wealth sectors, building on the momentum evidenced in the results for the fourth quarter of fiscal 2012," Mr Swanson said.
ClearView said its underlying profit reflected a favourable insurance claims experience that was partially offset by insurance lapse losses, lower fees from wealth management, and development costs associated with new products and infrastructure.
Also, clients had deferred retirement plans and related investment into retirement products, thus affecting ClearView's activity in the retiree market.
"In a weak and volatile market with hesitant investor sentiment, ClearView's result is a solid one," Mr Swanson said.
"The investment in developing our life and wealth product suites will deliver enhanced sales growth in the years ahead, as is already being evidenced."
ClearView also referred to a conditional, unsolicited takeover offer from CCP BidCo on July 12, 2012.
"The board considers the offer price of 50 cents per share is inadequate and materially undervalues ClearView," ClearView said.
"The board (other than John Murphy who has absented himself due to his association with a member of the CCP consortium) has unanimously recommended that shareholders reject the offer."
Shares in ClearView were 0.5 cents lower at 59.5 cents at 1139 AEST on Monday.
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